Music streaming service Spotify has established itself as market leaders after experiencing impressive growth in the last five years.
According to data presented by Trading Platforms, Spotify’s Global revenue grew at an incredible Compound Annual Growth Rate (CAGR) of 32.36% in the five-year period from 2015-2020, reaching almost €8bn in 2020.
Spotify’s revenue and gross profit experienced significant growth from 2015-2020
Spotify recorded an estimated €7.9bn in 2020, a 16.5% YoY increase from 2019. 2020’s revenue is the highest recorded by the company after experiencing a five-year CAGR of 32.36% from 2015-2020. Spotify’s premium revenue accounted for €7.1bn while Ad-supported revenue accounted for €745m.
The music streaming giant’s gross profit has also risen impressively in recent times, crossing the €2bn mark for the first time in 2020. In the five-year period from 2015-2020, Spotify’s gross profit grew at an impressive CAGR of 54.89%.
Spotify suffered net loss of more than €500m
Spotify has operated at a net loss since it was launched in late 2008 and in 2020 the company recorded €589m in net loss. The company attributes this net loss to high costs associated with content creation, marketing and sales and securing the rights of audio and video content.
Since 2019, Spotify has recorded cost of sales above €5B and in 2020 amounted to €5.7bn.
Sales and Marketing costs also crossed the billion Euro mark for the first time in 2020. In 2020, Research and Development cost experienced a 39% YoY increase to €855M. Spotify also added 1000 more employees globally in 2020 totalling 5584.
Rex Pascual, TradingPlatforms, commented: “Despite Spotify registering a net operating loss, the future still seems promising for the music streaming giants. If Spotify continues to successfully expand into other mediums such as they did with Podcasting, the company is poised to retain their status as market leaders of the music streaming service industry.”